LED market gets EU halogen ban boost

19-09-2018 |   |  By Nnamdi Anyadike

The banning by the European Commission of halogen light bulbs in the EU as of September 1 2018 – in order to encourage consumers to switch over to more energy-efficient light-emitting diode (LED) technology - has been broadly welcomed by environmentalists and, not surprisingly, LED suppliers alike.

Anna-Kaisa Itkonen, European Commission spokeswoman for climate action and energy said that phasing out inefficient lamps will "save 15.2 million tons of CO² emissions by 2025." This is equivalent to the emissions generated by around 2 million people per year. The Commission also estimates that switching to LED lamps will save consumers 115 euros over each lamp's lifetime and pay back its cost in less than a year.

The decision to ban halogen light bulbs, which under EU guidelines are rated a "D" for energy efficiency - the lowest rating available, was taken in 2009 and formed part of Europe's wide-ranging efforts to limit damage to the environment. The original phase out date was September 1, 2016. However, the Commission concluded that more time was needed. It was mindful of the fact that for close to 100 years, European consumers have been accustomed to purchasing cheap disposable light bulbs to light their homes.

But the onward march of LED lighting seems to be unstoppable. Countries throughout the world, encouraged by an UN-led initiative, have taken steps to ban 100W, 60W and 40W incandescent light bulbs. In 2017, the LED market was worth around $33.1 billion up from $29.6 billion in 2016. And by the end of 2018, growth is predicted to reach around $37 billion.

By contrast, sales of incandescent light bulbs have fallen sharply. Philips Lighting (now known as Signify) estimates a fall in annual global sales over the past decade from 12 billion units to 2 billion units.

In May at the Energy Efficiency Global Forum in Copenhagen, the UN Environment Programme, Natural Resources Defense Council (NRDC), and Signify unveiled a model lighting regulation. The UN hopes that this will enable developing countries in Asia, Africa and Latin America to more easily adopt energy-efficiency standards that are the equal to those of the United States and Europe.

The UN does accept that to some extent it will be an uphill struggle as electricity-wasting bulbs are still widely available in developing countries. However, it believes that its guidelines could produce $18 billion in electricity savings, and reduce carbon dioxide emissions by more than 160 million metric tons each year. According to Noah Horowitz, senior scientist and director of the Center for Energy Efficiency Standards with NRDC the guidelines are “ready to be ‘cut and pasted’ into law.

They provide for two options: ‘Option A’ is designed to remove incandescent, halogen and most CFL bulbs from the market and leapfrog directly to LEDs; ‘Option B’ also aims to drive incandescent and halogen bulbs from the market and favours LEDs. However, it still permits the use of CFLs. Countries are being urged to choose Option A as it yields higher energy savings and avoids the use of mercury.

In the next decade, the LED market will be shaped by two key drivers: the increased sophistication of LED products; and the growing dominance of China as a manufacturer. Sophisticated bespoke LED products are already popular. This is due to an oversaturation of the market over the past couple of years by generic LED bulbs, tubes, and panels manufactures. Demand for bespoke LED products used in interior décor, hotels and bars, commercial offices, outdoor places, parking lots, and other areas is expected to grow at an accelerated rate in the coming years.

But the most transformative LED growth area is the trend towards ‘smart’ LED lighting. Smart light fixtures are moving from being a luxury to applications such as indoor residential lighting, security lighting and in public spaces (for example, streets).

Germany’s Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) is in the forefront of supporting LED street lighting. It has invited municipalities, institutions and companies with municipal participation to apply for funding for the renovation of street lighting and traffic lights, by 30 September 2018.

Meanwhile, a number of manufacturers in the west are looking to launch themselves onto the smart LED lighting systems market. However, China’s dominance remains unrivalled, and will continue to be so for well into the foreseeable future. The Chinese government has for years offered LED manufacturers various incentives including financial subsidies, tax benefits, land, and other benefits in an effort to promote the growth and expansion of the Chinese LED industry.

The support is part of the government’s commitment to increasing the country’s global LED market share to 25%. Beijing has also taken steps to address some of the market’s concerns about low-quality LED lighting products. And this year, it implemented LED lighting quality standards that it says are designed to help weed out unscrupulous LED manufacturers and distributors.

 

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By Nnamdi Anyadike

I have 30 years experience as a freelance business, economy and industry journalist, concentrating on the oil, gas and renewable energy, telecommunications and IT sectors. I have authored a number of well received in-depth market intelligence reports. And I have also spoken at conferences.

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